Nifty Bank recovers 350 points from day's low on MPC's decision today to keep repo rate unchanged

"The index next hurdle on the upside stands at the 41,500-41,600 zone, which can act as a profit-booking zone for the short term. The index, however, surpassing those levels on a closing basis, can extend the rally towards 42,000 or to 42,500 levels. The lower-end support is visible at the 40,600-40,500 zone, which will cushion the bulls, says Kunal Shah, LKP Securities.

Nifty Realty and Nifty PSU Bank are the top two indices with gains of 2.2 percent and 1.5 percent respectively.

Madan Sabnavis, Chief Economist at Bank of Baroda says "RBI has subtly indicated that while there is a pause this time it will be ready to act if data is adverse. Therefore this pause should be interpreted with caution.

Sabnavis further adds that he does not expect lowering of rates anytime soon "Given the expectation of inflation to trend down in March and April, there would be status quo in next policy. But if cereal prices or oil price increase or if El Nino is severe, then MPC will increase rates. We should not think of lowering of rates any time soon."

Rajani Sinha, Chief Economist at CARE Edge says "While RBI has paused on the policy rate front, it has also strongly reiterated its commitment to bringing down inflation. Given the uncertain global environment and lingering risks to inflation, it is only apt that the Central Bank keeps the window open for further monetary policy tightening in future if required. However, with inflation likely to trend downwards from the current level, it is unlikely that RBI will have to hike rates further in 2023."